Diabetes affects recovery from ischemic insult by blunting the neovascular response. Ischemic neovascularization occurs via two fundamentally different pathways: the sprouting of new blood vessels from existing vessels (angiogenesis), and the recruitment, proliferation, and assembly of bone marrow-derived progenitor cells into new vessels (vasculogenesis). Our work over the last four years has shown that diabetes impairs new blood vessel formation in response to hypoxia by causing abnormal ischemia-induced signaling as well as impaired progenitor cell proliferation, function, and trafficking (i.e. impaired vasculogenesis). We have shown that these derangements in progenitor cells are caused in part by reactive oxygen species (ROS), which reduce the number and function of bone marrow-derived mesenchymal stem cells (MSCs) and endothelial progenitor cells (EPCs). Normalizing blood glucose does not reverse these effects, which may contribute to the phenomenon known as hyperglycemic memory. It is our fundamental hypothesis that diabetes- induced derangements in progenitor cell biology underlie the observed impairments in ischemia- induced vasculogenesis. In this proposal, we will determine how bone marrow-derived mesenchymal stem cells contribute to the development of new blood vessels in the setting of hypoxia (SA1), examine the how hyperglycemia alters these progenitor cell populations, including MSCs and HSCs (SA2), and clarify how hyperglycemia-induced ROS alters pathways affecting cell cycle progression and decreased stem cell capacity in MSCs, EPCs and HSCs (SA3). Finally, to determine the clinical relevance of our findings, we will examine human circulating EPCs and bone marrow-derived MSCs and HSCs from non-diabetic and diabetic patients (SA4).